2. COST ACCOUNTING CONCEPTS FOR IS ORGANIZATIONS › 2.11 Network Accounting
2.11 Network Accounting
Using network data sources for accounting allows direct
recovery of the cost of the data communications network
rather than its being absorbed as an overhead.
There are several types of algorithms that are available for
network accounting. The use of any algorithm must reflect
the IS organization's structure, which may or may not be
reflected in the design of the network. This section
discusses three chargeback scenarios for networks with
identical topologies but different organizational structures.
THE EXAMPLE NETWORK
In the following examples, the network consists of two sites
as shown in the figure below.
T T
-------- / /
| | ----/ ----/
| HOST |---| |-------------------------| | ------- T
| | ----\ ----\
-------- \ \
T T
SITE A SITE B
Site A has the host processing resources and a communications
processor (37xx equivalent). Site B has only a
communications processor. Both sites have terminals attached
to the network.
DATA PROCESSING AS A CENTRALIZED SERVICE FOR THE ORGANIZATION
In the data processing as a centralized service scenario,
data processing is seen as tightly controlled. The central
communications staff makes the decisions concerning the type
of service, level of service, network topology, line speeds,
terminals utilized, and so on.
Communications costs are allocated to end users based solely
on the volume of data transmitted. The total communications
costs are divided by the total traffic load to produce a
cost-per-byte factor, which then applies to all traffic.
Typically, the cost-per-byte factor is adjusted on an annual
basis.
Since the user makes no decisions concerning the line speed,
routing of transmissions, or service level of the
applications, these factors are not taken into account in
setting rates. It is assumed that the design of the network
maximizes the cost/performance ratio as defined by the
organization planners.
DATA TRANSMISSION AS A CENTRALIZED RESOURCE
In the data transmission as a centralized resource scenario,
data processing is viewed as a resource to be shared equally
by all entities within the organization. The organization's
communications network provides the connection to this shared
resource. Typically, the user is responsible for the costs
of the boundary circuits, terminal control units, modems, and
local support personnel.
Costs of the network are allocated based on traffic volume
and distance from a virtual host processor resource that is
located equidistant from all users (despite the fact that the
real data center is located at Site A). Charges may also be
based on a standard network link speed and may be adjusted
for varying link speeds.
GUEST USERS
In the guest users scenario, Site B is a paying guest of Site
A. Site B, which may be an acquired subsidiary of Site A,
gains some advantage from using Site A's processing
resources.
Site B bears the total cost of the data transmission to Site
A, regardless of the distance. Site A does not subsidize
Site B's communications costs, as in the example of the
centralized resource, even though Site A may choose, install,
and support all of the communication equipment.
Costs are allocated by totaling the costs of communication
and dividing them by Site B's traffic volume to arrive at a
cost-per-byte factor, as in the example of the centralized
service.
SUMMARY
In each of the above examples, only the actual communications
costs are recovered (modems, terminals, control units, links,
support personnel, test equipment, etc.). Host processor
costs are still recovered based on an application's
consumption of host resources.
The differences in algorithms result from the interpretation
of which portion of the resources belongs to the organization
as a whole and which portion belongs to the end user.
